Janaka Gunawardena, Chief Executive Officer of Aitken Spence Logistics, deep dives into the company’s strategy to redefine the logistics sector with a holistic, integrated approach covering all aspects of the supply chain, from sourcing to delivery. Prioritizing client satisfaction, technological innovation, and operational efficiency, Aitken Spence Logistics has strategically located facilities augmented by advanced tracking and analytical tools and collaboration with carriers, suppliers, and customs authorities to ensure smooth operations.
Gunawardena joined Aitken Spence Group in 2016 with over three decades of managerial experience spanning integrated logistics, supply chain, FMCG, and real estate. Starting his career at Unilever Sri Lanka, he has held leadership roles internationally, including positions at Trans-Ware Logistics of John Keells Group, DHL Nepal, GAC Pakistan, and GAC Abu Dhabi/Kuwait. Armed with an MBA from Western Sydney University, the Chartered Member of The Institute of Logistics & Transport UK now helms the integrated logistics sector of Aitken Spence.
In this interview, Gunawardena discusses Sri Lanka’s logistics infrastructure and aspirations to become a regional hub and Aitken Spence Logistics’ contribution to reviving and reimagining the sector.
After years of slow movement Sri Lanka’s logistics infrastructure, including ports is receiving investment. What will this mean for the industry’s future?
The efficiency of a supply chain and port infrastructure is pivotal in influencing a company’s investment decisions. Modernizing Sri Lanka’s ports not only signifies the nation’s dedication to facilitating trade but also heightens its allure to potential investors. An integrated and robust logistics network can be a magnet for foreign direct investment. Advanced logistics allow for the efficient handling of cargo and accommodation of larger vessels, paving the way for expanded trade and burgeoning international business interest, which in turn fuels economic growth.
Optimized logistics operations enable businesses to cut transportation costs, streamline the movement of cargo, and reduce lead times. This efficiency not only propels economic growth and cost-saving but also bolsters Sri Lanka’s position in the global market. Enhanced cargo processing, shorter transit durations, and increased reliability amplify the appeal of Sri Lankan exports on the global stage.
Moreover, consistent growth in the logistics sector translates to job creation across its various facets, including transportation, warehousing, and distribution. This amplifies its contribution to the national economy.
However, unlocking these benefits requires adept management, a conducive regulatory framework, political stability, and favourable global economic conditions. While infrastructure investment offers multiple benefits, strategic planning and execution are essential to tap into the full potential of Sri Lanka’s industrial and economic landscape.
New port terminals themselves won’t grow an industry. What other areas need focus and investment?
Simply building new port terminals is not enough to expand the industry. For genuine growth in logistics, a holistic strategy is essential and encompasses not just new port terminals but also a seamlessly integrated transportation system, enhanced trade facilitation, streamlined digital processes, and workforce development. Additionally, accelerating initiatives like the establishment of a port community system is key to achieving these goals.
Sri Lanka’s industry is not well linked to global supply chains. Despite this drawback how can the logistics industry achieve growth?
Leveraging its prime location on major trade routes and creating transshipment centres, Sri Lanka can forge robust connections between different regions and fortify its industry. Strategically situating Special Economic Zones near ports could attract foreign investment. Offering value-added services and initiatives tailored for small and medium enterprises provides distinct advantages. By embracing collaborative partnerships and modern technology, the nation can expedite its integration into the global arena.
Could you comment on the legal and regulatory environment and the challenges and opportunities Sri Lanka has in that area?
The framework of laws and regulations significantly influences a nation’s business climate, and this is evident in Sri Lanka. Recent initiatives, such as digitalizing trade procedures, have bolstered the efficiency of cross-border transactions. Special Economic Zones, exemplified by the Colombo International Financial City, present a blend of incentives and operational ease, enriching the business atmosphere. Meanwhile, the Board of Investment encourages investments in diverse sectors. Partnerships between public and private entities stand out as vital for hastening infrastructure development. Engaging in trade agreements, like SAFTA, expands Sri Lanka’s market accessibility. Nevertheless, Sri Lanka should intensify its endeavours to boost transparency, streamline procedures, improve the ease of doing business, and refine its regulations. Such measures will attract more foreign investors and unlock the logistics sector’s full potential, paving the way for enduring economic growth.
How does Aitken Spence plan to create a winning proposition in this sector?
For over four decades, Aitken Spence Logistics has carved an impressive legacy by offering comprehensive supply chain solutions. The company seamlessly integrates myriad services, from container handling and storage to project cargo logistics and mobile storage solutions. This holistic approach greatly amplifies the entire supply chain’s value. While prioritizing exceptional service, punctual deliveries, and efficient cargo management, client satisfaction remains paramount.
Leveraging cutting-edge technologies like Robotic Process Automation (RPA) and data analytics, we’ve heightened transparency and operational prowess. Our commitment to customizing logistics solutions gives us a competitive edge, catering to specific client needs. Through strategic alliances, we’ve expanded our global footprint, enhancing our capacity to manage complex international supply chains. Rigorous adherence to international trade regulations bolsters our reputation for reliability. Investing in our employees underscores our commitment to fostering a talent pool equipped to navigate future logistics challenges.
Our agility in adapting to market dynamics allows us to capitalize on emerging business prospects swiftly. These attributes are instrumental in cementing our leadership position in the industry.
Covid-19 caused much volatility in freight costs. What is the short- to medium-term outlook now for the sector?
The pandemic has introduced persistent disruptions, leading to unpredictable freight costs and shipping rates. These variations stem from supply chain challenges, port congestion, and evolving consumer preferences. To adapt, businesses are diversifying their sources, maintaining higher inventory, and considering alternative shipping paths. The rising dominance of e-commerce is likely to keep demand robust, influencing pricing and capacity dynamics. Additionally, the direction of trade policies and accords will play a role in shaping overall expenses.
Over the medium term, the logistics sector is anticipated to find some stability, bolstered by improvements in infrastructure and the broader integration of tech-driven solutions. A global economic upturn might boost trade activities, offering some equilibrium to supply chains and their operational costs.
However, factors such as the Russia-Ukraine conflict, measures by Central Banks to control inflation, and a slowdown in manufacturing in key markets could decisively impact the industry’s outlook. How should the country’s logistics sector be positioned?
For Sri Lanka’s logistics sector to strategically flourish, it’s essential to capitalize on its prime geographical position along major trade corridors, aiming to become a leading global transshipment hub. Central to this ambition should be the establishment of efficient cross-border networks, underscoring top-tier port operations and extensive multimodal connections. These enhancements are geared towards attracting businesses seeking streamlined logistics solutions.
Moreover, highlighting the region’s strong links to adjacent markets can underscore the rapid and effective goods transit. To stand out in a saturated market, the sector might consider offering bespoke value-added services, embracing ESG standards, and adopting cutting-edge technological solutions.
By championing a broad array of transport options, and emphasizing added strengths like strategic trade pacts and a skilled workforce, Sri Lanka’s logistics realm can craft a unique and appealing profile that resonates with its inherent strengths.
Aitken Spence has a long history in logistics. How do you plan to build upon this?
For over four decades, Aitken Spence Logistics has solidified its standing in the industry through a business model anchored on three fundamental tenets: customer-centricity, technological innovation, and operational efficiency. This strategy has not only elevated supply chain transparency but has also enriched the client experience. Catering to an esteemed clientele, encompassing international shipping lines, freight forwarders, and multinational enterprises, the company is lauded for its agility in navigating the ever-shifting supply chain terrain and its knack for crafting tailored, top-tier solutions.
Furthering our commitment, we’ve initiated a strategic investment plan focused on infrastructural expansion and enhancement. A notable recent addition is our state-of-the-art Container Freight Station (CFS) in Mabole, Wattala, spread across 100,000 square feet within our primary logistics complex. Its strategic location, close to both the Port of Colombo and the Bandaranaike International Airport, offers unparalleled connectivity. The CFS, boasting 32 loading bays and storage for 15,000 pallets (equivalent to a 20,000 CBM capacity), signifies a major stride in our overarching strategy for capacity expansion, geared towards operational distinction, supply chain value enhancement, and elevating service benchmarks.
In a bid to further streamline operations, we’ve embraced Robotic Process Automation (RPA) for our CFS functions. In collaboration with Deloitte of Singapore and Malaysia, we’ve automated various documentation procedures, covering both customer engagements and liaisons with governmental and third-party entities. This results in heightened accuracy and operational efficiency for the CFS. We’ve also augmented our Inland Container Terminal by launching a 5-acre container yard at Welisara, which bolsters our storage capacity by 2,500 TEUs. Plans are underway to expand this by another 4 acres shortly.
On another front, we’ve bolstered our Mobile Storage Solutions division through strategic acquisitions, solidifying our dominant position in the reefer container rental domain and achieving a market share that surpasses 50%.
A vision for the sector must consider integrated logistics, how is Aitken Spence set up for this?
Aitken Spence Logistics offers a holistic range of services that covers every facet of the supply chain, from procuring raw materials to delivering finished products. Our integrated approach combines transportation, advanced warehousing solutions, streamlined order fulfilment, efficient customs clearances, and value-added services, all aimed at elevating the client experience.
Located strategically, our facilities are enhanced with advanced tracking and analytics tools. This technological integration ensures seamless progression through each supply chain phase. Integral to our success are the strong partnerships we’ve cultivated with carriers, suppliers, and customs authorities, which guarantee synchronized operations across the logistics landscape.
Driven by our unwavering dedication to efficient solutions, Aitken Spence Logistics not only thrives in its operations but also makes significant contributions to the broader economy. Our core strategy emphasizes customer satisfaction, technological advancements, and building operational capacity. This approach cements our reputation as a dependable logistics partner. Our consistent high performance underscores our commitment to operational prowess and delivering uninterrupted, top-tier solutions to our esteemed clientele.